Commercial transactions in the form of electronic payments are becoming the standard and preferred means of purchase, and it is becoming increasingly rare to see a business operate on a cash only basis. Consumers are relying more and more on a variety of payment options to pay for a wide range of consumer goods and services. In particular, consumers are now relying on various forms of credit, debit and prepaid cards.
The use of credit cards has been available for more than fifty years and has long been thought of as the reasonable alternative to cash purchases. Large retail stores such as Sears® were initially responsible for their increased popularity and for their first wave of mass distribution. However, early versions of these credit cards were “use” restricted and were accepted only in issuing stores or in affiliated chain of retail stores. Under the early versions of the credit card programs, a retail store would first establish a credit account and determine a credit limit for each credit card applicant. Under a credit card transaction, the cost of the purchase would be debited against the store established credit limit. In effect, the store would honor a promise to pay the purchase amount at the end of a billing cycle.
Since those early days, consumer demand for credit cards has mushroomed to a level necessitating the creation of international processing networks and services such as VISA® and MASTERCARD®. These universal credit card programs allow consumers to make use of credit cards internationally and most importantly allow them to use credit cards at various retail stores, regardless of the merchant selling the product or service. These universal credit cards are primarily issued by sponsoring banks that extend credit to credit card holders. When a consumer makes use of a credit card from a participating bank, the credit card number, the cost of the purchase, and the expiration date as well as other transaction identifying and validating information are transmitted to the credit card program's processing center. During the purchase process, the validity of the credit card number is first established, and then a determination is made whether to allow the transaction to proceed based on a number of account based queries, such as the current balance on the account, and whether the card has been reported lost or stolen. Once approved, the purchase amount is debited against the credit holder's account and a decrement is made to the available credit balance. In return, the credit card holder promises to pay the entire account balance and if unable to pay the entire amount in full, to pay at least a minimum payment amount every month. In return, the issuing bank is the beneficiary of accrued interest charges assessed for non-payment of the entire balance, and of a percentage of the sale price. Moreover, the bank is also the beneficiary of an annual membership fee assessed each card holder for the privilege of having a credit card.
Most recently, and perhaps due to rising concerns over the U.S. economy and the fears about increasing debt load, debit cards have become increasingly more popular. Like credit cards, they are generally associated with an issuing bank. However, debit cards are generally associated with a card holder's existing checking account or savings account and for the most part operate electronically in much the same way that credit cards do. The major distinction between credit cards and debit cards is however that debit cards, as a general rule do not extend a line of credit. Rather, debit cards operate with an actual and tangible balance of funds provided by the debit card holder. Under a debit card transaction, the purchase amounts are deducted from an existing balance at the time the transaction is confirmed and a small fee is paid to the issuing bank for each use. The result being that instead of creating an amount of debt through the use of credit cards, the debit card account decrements the balance of the checking or savings account by the amount of the purchase. Logistically, the processing of the debit against the available balance is done in much the same fashion as credit card transactions. In fact, credit cards currently available in the marketplace may be used in one of two ways. More specifically, these cards may serve as either a credit card or a debit card. At a point of purchase, for example, card holders are often asked to select whether the purchase will be conducted as either a credit or debit transaction.
Alternatively and as a variation to debit cards, prepaid cards are also gaining significant acceptance by the consumer marketplace. A prepaid card operates by first having a pre-established value assigned to it and by then having the prepaid card activated at the merchant's retail store or other point of purchase. The account balance of these prepaid cards is stored in most cases on the prepaid card itself through the use of resident memory. In other cases, however, a remote server dedicated to keeping track of the prepaid account balance is accessed and notified of the transaction. As currently available, prepaid cards, for the most part, are merchant sponsored and are primarily associated with one merchant. Merchant sponsored prepaid cards are normally, only available for use at a merchant's retail point of purchase and are limited in its purchasing power by a pre-established balance. Prepaid cards are typically assigned preset denominations of $10, $25, $50, $75 and $100 cash value. Merchants such as HomeDepot® and Blockbuster® are just two the merchants that have been very successful at distributing prepaid cards for use at their retail stores. The obvious advantage to the use of these cards is that it obligates a consumer into spending the assigned cash values at the issuing merchant. Moreover, prepaid cards provide a means for offering these prepaid cards as gifts to someone without the need for establishing an actual account with the merchant and without the risk of overspending beyond the established limits.
Prepaid cards have not been limited to the purchase of durable goods, but rather have also been used for the purchase of services. In the telecommunications marketplace, for example, prepaid calling cards have during the last ten years also shown significant acceptance by the consumer. At first, telephone companies issued “calling cards” which were best categorized as credit cards for telephone services. These calling cards are typically assigned a calling card number composed of the card holder's ten digit telephone number followed by a four digit pass-code. When a consumer wants to make a call, the caller either dials an “8YY” number to access the telecommunications network or enters “0” followed by the telephone number and the four digit pass-code number of the calling card, and upon hearing a prompt, the calling party enters the number of the called party.
Prepaid calling cards in a debit card mode of operation have also been applied to telecom services. Typically, telephone prepaid calling cards are issued by telephone companies (“TELCOs”) or other retail organizations that buy and resell telephone services to the marketplace. Like other prepaid cards, telephone prepaid calling cards have an assigned and pre-set spending limit in dollars, minutes or other service unit denominations and like other prepaid cards the telephone service available is only associated with one TELCO. As a call progresses in length, these pre-set balances are decremented during the call.
Telephone prepaid calling cards are normally assigned a ten, twelve or longer digit card number and a four digit personal identification number (“Pin”) by the prepaid calling card issuer. Prior to using the prepaid calling card for the first time, a caller is required to call a toll-free “800” number to activate the card and in some cases permit the caller to personalize and change the previously assigned Pin.
To make a call, the caller typically calls the calling card issuer's access number and is prompted to enter the calling card number and the associated Pin, followed by the called party's telephone number. During the call set up process, the calling card issuer's processing network or an outsourced account balance services provider monitors the call. Based on the length of the call and location of the originating and terminating telephone numbers, the billing system decrements the pre-set balance by pre-set number of minutes, preset cash value or other service unit denominations. When the calling charges equal the minutes, cash value or service units remaining on the calling card, the call is terminated.
The drawback to such prepaid calling cards is that they are generally rendered useless after the calling card balance has been exhausted. More importantly, though, such calling cards work in a very restricted mode of operation. Such calling cards permit only one call per card at any given time. In fact, a simultaneous attempt to use the calling card by a second caller having rightfully obtained the correct account code and Pin will be denied access. For the most part, the blockage of the second caller is a response to possible theft of the calling card or unauthorized access to the prepaid calling card service. Simultaneous usage of prepaid calling cards and concurrent management of multiple account balances are features that are absent from today's market place and that are necessary for sharing pre-set spending limits.
For the foregoing reasons, there is a need for a method and system for managing simultaneous use of prepaid calling card services in a real-time or nearly real-time environment and for simultaneous management of preset spending limits so as to make available funds to all users of the service while maintaining control of account usage by the calling card services provider.